- Oct 28, 2007
- Reaction score
- Political Leaning
The UK's top-ranked AAA credit rating is safe, thanks to the government's austerity measures, according to the rating agency Moody's.
The agency said the outlook for the UK's public finances remained stable, despite slower growth.
"The global financial crisis of 2008-09 caused serious long-term damage to the British government's balance sheet," said Moody's analyst Kenneth Orchard.
But he said the UK has "the wherewithal and ability to meet these challenges".
"Moody's stable outlook... is largely driven by the government's commitment to stabilise and eventually reverse the deterioration in its financial strength," said the rating agency in its report.
As well as the country's large exposure to the financial services sector, Moody's also noted the growth-sapping impact of household debt repayments and struggling export markets for the UK.
"The UK economy appears sufficiently flexible and robust to grow moderately, even in the face of.. austere fiscal consolidation," the agency added.
The British government has enjoyed a AAA rating from Moody's ever since it first received a long-term debt rating in 1978. BBC Business
While there's always the risk the medicine will kill the patient, the recent news by Moody's shows that we took the right actions in dealing with crippling debt and cutting the runaway spending (and debt driven society) that we had become.
More worrying however is that Banks are still not passing on the cuts or continued low rate in interest to consumers and they are still not agreeing loans to industry - this includes banks that we (taxpayers) have had to by default invest in to prop them up.
It is time the public had a greater say over the policies and actions of banks which we have had to invest or save: there's less borrowing available for industry and apparently it costs more.
It gets harder and harder to justify the costs to services when the savings are not being invested in the manufacturing future of this country.